iSixSigma

Integrate Values into Business Processes

The intent of any organization’s process improvement efforts is to improve the effectiveness (e.g., reduce defects) and efficiency (e.g., cost cutting per transaction) of the business process. What one often does not see as part of the effectiveness definition, however, is the expectation that the newly redesigned or improved business processes need to reflect the stated core values of the organization.

It is one thing for a company to have written values, but to fully create the desired company culture, the organization’s business processes must manifest its guiding principles. When undertaking process improvement, such as a new system implementation, a company is in a position to ensure alignment of its stated values and its day-to-day operations.

Example: Online Travel Company

Consider the case of a large online travel company. It has a policy of charging $25 for every cancellation regardless of the reason. The policy has been embedded as a business rule in the information system.

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When an earthquake in Indonesia initiated a tsunami, the resulting damage made travel to and in the region unrealistic. The call centers of the company received many requests to cancel booked vacations. Many travelers had booked flights, hotels, cars and excursions. The business process scenario the call center used is as follows:

  1. The customer calls to cancel the bookings.
  2. The call center agent informs the customer that fees will be charged as a part of the booking cancellation.
  3. The customer explains that the destination has been decimated.
  4. The agent explains that it is corporate policy to charge $25 for every booking cancellation; when booking cancellations are entered into the system, the system will automatically charge $25 for each booking cancellation.
  5. The customer loudly expresses frustration and asks to speak to the supervisor.
  6. The agent transfers the call to the supervisor.

Although the company espoused employee empowerment, the agent was not empowered. The agent knew that charging cancellation fees under these circumstances did not make sense. The policy and its implementation into the information system, however, ensured that the agent had no flexibility to make judgment calls and assign exceptions for customers. With this business process scenario, two questions surface:

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1. What needs to change in the business process to enable greater employee empowerment? 

Leaders must trust that their employees are capable of making good decisions. Nordstrom sales clerks, for example, are authorized to use their judgment to handle merchandise returns – exemplifying the company’s trust in and empowerment of its team members. In the case of the travel company, rather than rigidly deploying its policy of charging $25 for any booking cancellation, it can promote a guideline of charging $25 for any booking cancellation, unless there are “valid” reasons for the booking cancellations. Call center agents are then empowered to apply judgment and waive booking cancellation fees when appropriate.

2. How will this change influence the business requirements that an information system needs to support? 

To expedite the charging of booking cancellation fees, the system can continue to automatically charge $25 per booking cancellation fee. However, the system also needs to include functionality by which the travel agent can waive those fees.

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Integrating Company Values into Improvement Project

There are several ways in which integration of a company’s values can successfully occur. Some suggestions include:

  1. Identify the project manager and the sponsor for the business process improvement effort. The project manager should ultimately be responsible for meeting project goals.
  2. Seek out the guiding principles document (whatever it may be called) for the organization and make it a project goal to integrate these values into the improvement effort.
  3. Include the company’s values in a project charter as a part of the project’s acceptance assessment criteria.
  4. Facilitate additional analyses during the project when the current state is being evaluated:
    • What practices within the current process do not align with the company’s values?
    • What assumptions are being made that led to the current practices? How should the assumptions be validated?
    • What is the level of satisfaction with the practices?
    • How did those practices affect the features and functionalities of the supporting information system?
  5. Expand the design paradigm by asking additional questions when the future state is being developed, such as:
    • Based on the understanding of the current state, what business process practices should be changed to align with company’s values?
    • Who will be the cultural monitor to ensure the values are considered during the redesign effort?
    • What should the new business process practices be? How should they be piloted?
    • What is the team’s level of satisfaction with the practices within the newly designed process?
  6. Review the newly designed business process; prior to sign-off, ask the project team these questions:
    • What did you learn from the redesign effort with the company’s values as a part of redesign considerations?
    • How many times did the redesigned process change in order to solidify the values into the business process? Why?
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A Balancing Act

It is arguable that by having the practices within a business process align with the company’s core values, the redesigned process becomes less efficient. Efficiency, however, is just one key objective of any improvement or redesign effort, not the only one. Effectiveness, which includes the integration of company values, is an equally important objective. A project team should not strive for effectiveness or efficiency; a team must balance between effectiveness and efficiency.

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Comments 1

  1. Needs2Cash

    Of course, the organizational management system should train, authorize, trust and support its employees.

    It seems to me that the ‘efficiency calculations’ that resulted in the $25 cancellation charge took no account of the cost of replacing the dissatisfied customers.

    Also, if the travel company is truly online, why does any customer have to “call” to cancel?

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